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Does Crimea Cost Too Much for Ukraine to Keep?

By IAN BREMMER

March 09, 2014

The right statistic is often worth a thousand words—and sometimes much more than that. These five weekly data points, put together by Ian Bremmer, president and founder of the risk consultancy Eurasia Group, provide a glimpse into global trends, political dangers and international power dynamics. Some are counterintuitive facts. Others are small stats that tell a big story. This week, Ian looks at figures from Russia’s Crimean advances to chemical weapons in Syria—and what they mean for everybody else.

Between balancing Crimea’s budget and fulfilling its pension obligations, Ukraine shells out $1.1 billion a year to prop up its southern peninsula. And that’s not including the $3 billion investment Crimea needs to repair its crumbling infrastructure. This is all for a region with a gross product of around $4 billion—just 0.2 percent the size of Russia’s $2 trillion economy.

On March 4, the head of Gazprom, Russia’s state-controlled natural gas monopoly, announced that it would no longer sell to Ukraine at a discount, because Russia’s southwestern neighbor had “violated its agreements.” But, over the past five years, as Ukraine has updated or closed down many of its creaky factories and mining operations, its natural gas consumption has fallen by nearly 40 percent and its gas imports from Russia have dropped by half. In the meantime, with competition from inside Russian and out, Gazprom is struggling to hold onto its market share.

In November, the Syrian regime pledged to remove or destroy its entire chemical weapons stockpile by the end of April. But with just one month to go, about 70 percent of Syria’s declared chemical weapons material remains in the country and intact.

February was a good month for the eurozone, the group of 18 countries that have adopted the euro as their currency, with Markit’s monthly Eurozone Composite Purchasing Managers’ Index—a measure of the economic health of the manufacturing sector—coming in at 53.3, beating a preliminary estimate of 52.7. (Any number above 50 indicates expansion.) Markit, a leading financial services company, says the figures indicate the eurozone will grow by about 0.5 percent in the first quarter of 2014—the highest growth numbers in three years.

China says it will increase 2014 defense spending to nearly $132 billion, a 12.2 percent boost from last year. (Military spending rose 10.7 percent between 2012 and 2013.) The country’s defense budget is already the second highest in the world, but it’s still far behind the United States, with an official 2014 military budget of $526.8 billion.